#ManufacturingMonday – Leading in the News
There is a lot going on in the manufacturing world today. Thanks to the Manufacturing Economy Daily, below are just a few of the latest articles. Full online article here: http://mailview.bulletinmedia.com/mailview.aspx?m=2017120801nam&r=1841312-3070.
Leading the News
NAM Continues Push For Improvements In Final Tax Bill For Manufacturers.
The Washington Post (12/7, Long) reports, in an article on the state of tax reform legislation, that “the biggest last-minute change the Senate made was to keep the corporate alternative minimum tax (AMT) at 20 percent – the same rate as the new, massively lower business tax rate,” which means, “many businesses would not be able to take deductions and credits to lower their tax bill below 20 percent.” The Post writes that “the AMT neutralizes many of the other incentives like the research and development (R&D) credit that were meant to encourage companies to build new factories and expand their operations and jobs in the United States.” It points out that “manufacturing companies – the very businesses President Trump vowed to help in the campaign – would be hit especially hard,” and quotes NAM Vice President for Tax and Domestic Economic Policy Chris Netram saying, “Research and development is the lifeblood of manufacturing.” The Post also writes, “The National Association of Manufacturers sent a letter to Rep. Kevin Brady (R-TX) Wednesday that said ‘the top federal statutory corporate tax rate should not exceed 15 percent. This rate would make our nation’s manufacturers much more competitive in the global marketplace.’” The Hill (12/7, Jagoda), in a similar article, quotes Netram saying the NAM “supports pro-growth tax reform, and is working with key policymakers to ensure the final bill does not inadvertently harm manufacturing.” Reuters (12/7, Mason) reports White House Legislative Affairs Director Marc Short said in an interview that President Trump “wanted a corporate tax rate of 20 percent in the tax cut package.” Politico (12/7, Becker) reports, “the National Association of Manufacturers told lawmakers it would have ‘significant concerns’ if the corporate rate crept up past 20 percent,” adding that “the group also prefers the Senate approach to taxing pass-throughs, which offers those businesses a tax deduction.”
Column: Two Percentage Points In Corporate Tax Rate Can Have “Measurable Impact” On US Growth, Competitiveness. In a column for The Hill (12/7, Carter, McHugh), former Trump Administration Transition Team Tax Policy Advisors James Carter and Michael McHugh write that “the proposed 20-percent corporate tax rate is in jeopardy,” arguing that while an increase to 22 or even 25 percent “sounds like a small increase, especially compared to the current 35-percent rate, those two percentage points would have a measurable impact on economic growth and the attractiveness of the United States to international business.” The authors point out that “nine other countries in the Organization for Economic Co-operation and Development (OECD) have announced future corporate tax rate reductions,” adding that if the US adopts a 22 percent corporate tax rate, by 2020, “America would have a higher corporate tax rate than nearly three quarters of the OECD,” when combined with state and local corporate taxes. Carter and McHugh quote American Action Forum President Douglas Holtz-Eakin saying, “Tax reform should be about putting in place the growth and competitiveness incentives that are appropriate for the foreseeable future. Given the planned rate reductions among OECD countries, I have to believe that the right tax rate [gets] closer to 20 than to 22 percent.” The authors conclude that “two extra percentage points may not seem like much, but their impact would leave the US playing catch-up behind the rest of the world.”
Manufacturing Policy News
Infrastructure “Critical” To Manufacturing Competitiveness.
In a blog post for Shopfloor (12/7), NAM Director of Infrastructure, Innovation, and HR Policy Catie Kawchak writes that Transportation Secretary Elaine Chao said Wednesday that President Trump’s “infrastructure proposal would be released in the new year.” Additionally, Special Assistant to the President for Infrastructure Policy DJ Gribbin “joined a bipartisan infrastructure conversation that featured House Transportation and Infrastructure Committee Ranking Member Peter DeFazio (D-OR), manufacturers, farmers, truckers, and infrastructure financiers,” that involves “making manufacturing more competitive by advancing an infrastructure package.” Kawchak writes, “shop floors are commonly located in rural areas and rely on the same vital infrastructure needs as manufacturers in urban areas,” adding, “manufacturers look forward to a 2018 infrastructure package that advances and invests in energy, water, broadband and transportation infrastructure projects.” She concludes, “The NAM continues to build support among diverse stakeholder groups by advancing a comprehensive infrastructure proposal in the House and Senate.”
Separately, Bloomberg News (12/7, Niquette) reports that President Trump “plans to keep pushing his legislative agenda in 2018 by releasing his long-promised infrastructure proposal in early January.” The president “aims to release a detailed document of principles, rather than a drafted bill, for upgrading roads, bridges, airports and other public works before the Jan. 30 State of the Union address,” Bloomberg reports. The Administration plan “is essentially complete and Trump recently reviewed it,” and it “calls for allocating at least $200 billion in federal funds over 10 years to spur at least $800 billion in spending by states, localities and the private sector.”
Cargill Launches “FedByTrade” Site To Encourage Support For “Open, Fair” Trade.
In a press release, Cargill (12/7) announced the release of a new resource, FedByTrade, which is “designed to explain, through relatable stories, the pivotal role trade plays in feeding the world.” Cargill Chairman and CEO David MacLennan is quoted saying, “Trade is how we move food from where it is produced to where and when it is needed most – across countries, continents and oceans. FedByTrade provides a resource for all Cargill stakeholders to engage around the importance of trade – to our mission, job creation and the prosperity of our communities.” The release emphasizes that “the world benefits from an open, honest and fair system of trade,” and adds that “FedByTrade serves as a resource for Cargill to explore and share the wide range of trade benefits.”
Economic News
Labor Department: US Jobless Claims Fall To 236,000.
MarketWatch (12/7, Bartash) reports, “The strongest US hiring in years has reduced the number of layoffs to a 45-year low.” The Labor Department reported on Thursday that initial jobless claims “fell by 2,000 to 236,000 in the seven days ended Dec 2,” beating estimates by a survey of economists who “had forecast claims to total 240,000.” The Wall Street Journal (12/7, Nunn, Chaney, Subscription Publication) also reports.
LinkedIn Workforce Report: US Hiring Up 26% In November Compared To October.
CNBC (12/7, Lovelace) reports that the LinkedIn Workforce Report found that “US employers hired more people in November than last year, but fewer than in October of this year.” The report shows “hiring across the US was 26 percent higher last month than a year earlier,” and, “hiring has stayed consistently strong this year.” It adds, “Year to date, US hiring has been 10.4 percent higher in 2017 than in 2016.” In a sector-by-sector breakdown, the areas “with the biggest year-over-year increases were oil and energy, up 30 percent, manufacturing and industrial, 15.7 percent higher, and aerospace, automotive and transportation, which is up 13.7 percent.”
Federal Reserve: American Household Wealth Increases To $96.9T On Stock Gains, Home Values.
The AP (12/7, Rugaber) reports, “Surging stock prices and steady increases in home values powered American household wealth to $96.9 trillion this fall,” the Federal Reserve said Thursday. Total wealth in the country “has made a remarkable comeback since the recession, when it plummeted more than $10 trillion to $56.2 trillion.” NYU Economist Edward Wolff said of the figures, “The middle class is still way below where it was almost 10 years ago. What you’re seeing is wealth flowing to the very top even more so than in the Great Recession.”
Report: California Pension Fund At Risk With Focus On “Progressive” Investments.
The Washington Examiner (12/6, Pringle) writes that a new report from the American Council for Capital Formation (ACCF) says that the California Public Employees Retirement System (CalPERS) “is edging closer to financial disaster by investing in progressive-oriented companies instead of more-profitable ones.” CalPERS has recently “dedicated a significant portion of its portfolio to environmental and social causes to advance its progressive agenda,” and the report’s analysis “discovered that four of its nine lowest-performing funds were related to renewable and clean energy.” ACCF Vice President of Policy and General Counsel Tim Doyle is quoted saying, “Rather than focusing on getting the fund back on firm financial footing, CalPERS’s management is making questionable investments of pensioners’ money into social and political causes that are not yielding acceptable returns. And even more troubling, because of how big the fund is and how much influence it wields, it’s actually now forcing other large investors and proxy advisory firms with which it does business to follow suit.” The Examiner adds, “In its current state, CalPERS only has enough assets to pay for two-thirds of the money it owes to California public workers and retirees.” Forbes (12/5) also addresses the issue in a column.
Industry News
Spirit AeroSystems Announces $1 Billion Expansion, 1,000 New Jobs.
The AP (12/6, Hegeman) reports that Spirit AeroSystems announced a $1 billion expansion Wednesday “that will bring 1,000 new jobs to its aircraft manufacturing plant in Wichita, a move officials say reflects significant growth for the company and the aviation industry in general.” The expansion plans call for “hiring 800 new employees by the end of 2018 and 200 more the following year,” including mechanics, composite technicians, sheet metal workers, and machine operators. The Wichita City Council and Sedgwick County Commission “plan to vote on investing up to $14.5 million for joint ownership a new building at the site and other infrastructure needs.” Spirit CEO Tom Gentile told employees and government officials that “air traffic is growing at 7 percent a year, and that is the one statistic underlying the growth of the industry.” Gentile called the company’s growth “continuous,” adding that “we are literally bursting at the seams. We have a huge campus here in Wichita. We have been at this site since 1928, but we are really out of room.”
Planned Ford Electric Vehicle Factory In Michigan To Be “Manufacturing Hub” For Driverless Vehicles.
The Wall Street Journal (12/6, Colias, Higgins, Subscription Publication) reports Ford Motor Company announced that it reversing plans to build electric vehicles (EV) at its Flat Rock, Michigan, factory. Instead, it will move production of EVs to Mexico and convert the Flat Rock facility into a manufacturing center for driverless vehicles, potentially adding 850 new jobs.
USA Today (12/7, Howard) also reports.
DS Smith To Expand In US With 2 New Factories.
The Financial Times (12/7, Pooler, Reporter, Subscription Publication) reports that DS Smith, a manufacturer of cardboard boxes, plans further expansion in America and will open two new factories there. In public comments, CEO Miles Roberts has hinted at future US deals.
Political News
Trump EPA Vows To Replace Clean Power Plan.
The Hill (12/7, Cama) reports that the EPA is pursuing a replacement for the Clean Power Plan after the Trump administration vowed to repeal the regulation. The Trump administration’s climate rule “is likely to be far weaker than Obama’s, which sought a 32 percent reduction in the power sector’s carbon emissions.” The Washington Examiner (12/7, Siegel) reports that in his first testimony before Congress on Thursday, EPA Administrator Scott Pruitt said he “plans to replace the Obama-era Clean Power Plan, instead of just killing it outright.” However, Pruitt has also criticized the endangerment finding, – which forces the EPA to regulate carbon dioxide and other greenhouse gas, – saying the endangerment finding was “accelerated” and “short-shrifted.” The Hill (12/7, Henry) reports that EPA Administrator Scott Pruitt claimed the EPA under the Obama administration engaged in a “breach of process” when it relied on United Nations science for part of its endangerment funding. Pruitt cited a Bush adminstration-era ruling that determined federal law had not declared greenhouse gases as dangerous enough to warrant regulations.
Trump Administration Has Plan To Speed Permitting For ANWR Drilling.
Bloomberg News (12/7, Nussbaum) reports that a Trump Administration official said Thursday that it “has a plan in place to speed up permit reviews for drilling in Alaska’s Arctic National Wildlife Refuge if Congress approves exploration there.” Energy Department Counselor Vincent DeVito said, “We do have a plan for expediting that,” adding, “the pathway toward energy dominance runs through Alaska.” DeVito “declined to predict a timeline for the process, but said the department is getting ‘a regular stream’ of inquiries from industry about the potential for exploring in the area.”
The Association in the News
Microsoft Philanthropies Aim To Close Skills Gap Through Training.
The Seattle Times (12/6) reports a story on the efforts of Microsoft Philanthropies to address the skills gap by means of technical education. The article states that “the Seattle area is currently estimated to have more than 50,000 open tech-sector jobs,” but, “companies are struggling to fill them with local talent, as 60 percent of high schools in our area don’t even offer introductory computer science classes.” The article cites a study by Deloitte and the Manufacturing Institute stating, “an estimated 3.4 million manufacturing jobs will become available by 2025” in the US, but, “its estimated that two million of those will go unfilled due to a skills gap.” The Times adds, “The same study found manufacturing executives rated 70 percent of current manufacturing employees as deficient in technology and computer skills.” Microsoft programs, such as Year Up, focus on “how they can best support programs like this one that can address the growing skills gap in the changing needs of our workforce.”
